Union Pacific hires CEO favored by hedge fund as profit falls 15% last quarter on weakening demand

abcnews.go.com:

Union Pacific has hired the CEO candidate favored by a hedge fund that's been pressuring the railroad to improve

OMAHA, Neb. — Union Pacific has hired the CEO candidate favored by a hedge fund that's been pressuring the railroad to improve amid disappointing results driven by weakening consumer demand and higher labor costs.

The Omaha, Nebraska-based railroad said its former chief operating officer Jim Vena will take over as CEO next month. Soroban Capital Partners, a hedge fund that holds a $1.6 billion stake in Union Pacific, had been urging the railroad to hire Vena because of his expertise in streamlining operations.

The hedge fund said that UP lagged behind its peers during Lance Fritz' 8-year tenure in all key measures. Soroban declined to comment on the hire Wednesday, but investors resoundingly endorsed it by sending Union Pacific's stock soaring more than 10% to $238 Wednesday.

“I am excited about returning to Union Pacific and look forward to the journey to be the safest, most reliable and most efficient railroad in the industry,” Vena said in a statement. “Working closely with the entire team, my focus from day one will be to ensure the company delivers industry-leading customer and operating excellence, cultivates and empowers our employees, and cares for the communities in which we operate."

Fritz acknowledged that the railroad didn't deliver “consistent and reliable” service during his tenure, and “that needs to be remedied.” He said proving to Union Pacific customers they can count on good service will help the railroad attract new business and improve profits in the future. At times, UP has struggled to handle everything companies wanted to ship after cutting too deep during the pandemic. Regulators had